U.S. SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C. 20549
                               FORM 10-KSB

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934 [Fee Required]
    For the fiscal year ended April 30, 1998
    OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934 [No Fee Required]
    For the transition period from _______________ to _______________

                       Commission File No. 0-9848

                              Initio, Inc.
            (Name of small business issuer in its charter)

            Nevada                        22-1906744
(State or other jurisdiction of        (I.R.S. Employer
 incorporation or organization)         Identification No.)

       2500 Arrowhead Drive, Carson City, Nevada             89706
       (Address of principal executive offices)            (Zip Code)

     Issuer's telephone number, including area code: (702) 883-2711

     Securities registered pursuant to Section 12(b) of the Act: None

        Securities registered pursuant to Section 12(g) of the Act:
                      Common Shares, $.01 par value

                             (Title of Class)

 Check whether the issuer (1) filed all reports required to be filed by 
Section13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months 
(or for such shorter period that the registrant was required to file such 
reports), and (2) has been subject to the filing requirements for the past 
90 days.
                         Yes    X       No _____
 Check if there is no disclosure of delinquent filers in response to Item 
405 of Regulation S-B in this form, and no disclosure will be contained, to 
the best of registrant's knowledge, in definitive proxy or information 
statements incorporated by reference in Part III of this Form 10-KSB or any 
amendment to this Form 10-KSB.  [  ]

 State Issuer's Net Revenues for its most recent fiscal year: $11,134,000.

 State the aggregate market value of the voting stock held by non-affiliates 
ofthe registrant:  $4,128,476 (based upon the high and low prices of the
registrant's Common Shares, $.01 par value, as of July 24, 1998).

 State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.

Common Shares, $.01 Par Value                             4,778,474
     (Title of Class)                            (No. of Shares Outstanding
                                                      at July 23, 1998)

                 DOCUMENTS INCORPORATED BY REFERENCE:  None
Transitional Small Business Disclosure Form (check one):
                                             Yes___             No   X


                                     PART I

Item 1. Description of Business.

  (a) General Development of Business.
  Initio, Inc. (the "Company") was incorporated under the laws of the 
State ofDelaware in 1968 and became a publicly-owned corporation in 1970.  
Effective asof February 1, 1994, the Company changed its State of 
incorporation from Delaware to Nevada.  The Company's principal offices are 
located at 2500 Arrowhead Drive, Carson City, Nevada 89706 and its telephone 
number is (702) 883-2711.

  The Company, through its wholly-owned subsidiary, Deerskin Trading 
Post, Inc.("Deerskin Trading Post"), is engaged in the mail order retail sale 
of consumer products principally through mail order catalogs, and to a lesser 
extent through media advertising.  The Company's "Deerskin" catalogs are 
primarilydevoted to the sale of leather goods and the Company's "Joan Cook" 
catalogs areprimarily devoted to the sale of housewares and gifts.  The 
Company's customers are located throughout the United States.

RECENT DEVELOPMENTS

Relocation of Mail Room and Call Center  Customer orders for merchandise, by
mail and telephone, during the fiscal year ended April 30, 1998 were 
received and processed at the Company's facility in Peabody, Massachusetts. At
the end of May, 1998 the Peabody mail and call center were closed and relocated
to the Company's centralized fulfillment center in Carson City, Nevada.  On 
December 3, 1997 the Company entered into a Purchase and Sale Agreement with 
respect to Company's building at 119 Foster Street in Peabody, Massachusetts 
for a sale price of $550,000.  In April, 1998 the buyer under that agreement 
defaulted and as a consequence the Company, pursuant to the terms of the 
Purchase and Sale Agreement, kept the deposit of $52,500 as damages for breach 
of contract by the buyer.  The Company is presently in discussions with another
potential buyer of the property however, there can be no assurance, that such 
negotiations will result in the execution of a Purchase and Sale Agreement and 
a subsequent sale of the premises.  At the present time the building is 
unoccupied.  As a consequence of the Company's closing of the Peabody facility 
the Company has accrued $47,000 of severance and other "exit" costs at April 
30, 1998.

Catalog Close-Out Store.  The Company's Catalog Closeout Store which is
presently located in Danvers, Massachusetts has a lease which expires in 
the next fiscal year and the Company does not anticipate renewing that lease. 
In anticipation of the liquidation an inventory valuation provision of 
$564,000 has been included in the results of operation for the year ended 
April 30, 1998.

Loan Agreement With Pioneer Ventures Associates Limited Partnership.  In
February, 1998 the Company entered into a agreement with Pioneer Ventures
Associates LP providing the Company with up to $5,000,000 in a 
subordinated loan with interest at 8% per annum.  In February, pursuant to the 
terms of that agreement, the Company issued to Pioneer a convertible 
subordinated debenture in the principal amount of $3,000,000, convertible at 
$3.00 per share, with interest at 8% per annum.  These funds were used by the 
Company to replace its previously existing line of credit with Summit Bank.  At 
that time the Company received a commitment for up to an additional $2,000,000 
to be used for certain specified purposes.

(b) Narrative Description of the Business.

  The Company, via its Deerskin Trading Post subsidiary, is principally 
engaged in the mail order retail sale of consumer products through its 
Deerskin and Joan Cook catalogs and to a lesser extent through media 
advertising.  The Company is currently engaged in a single industry segment, 
i.e. specialty mail order retailing of consumer products.

The Company is a specialty mail order retailer of men's and women's 
leather outerwear, footwear, other apparel and accessories through the 
Deerskin catalog, and housewares and gifts through the Joan Cook catalog.  
The Company also sells merchandise via media advertising.

The Company seeks to provide its customers with competitively priced 
products that can be differentiated from competitive items either by design, 
workmanship or price.  The Company guarantees customer satisfaction.  If for 
any reason, or no reason, a customer is not completely satisfied with any  
purchase, the Company will replace it, exchange it or refund the amount paid 
or it, whichever the customer prefers, provided the merchandise is returned 
unused and unaltered within one year from the date of shipment. For the year 
ended April 30, 1998 the refunds for merchandise shipped were 16.3% for 
Deerskin catalog orders and 5.9% for Joan Cook catalog orders, respectively.

The Company also operates a catalog close-out center in Danvers,
Massachusetts which sells excess mail order merchandise as well as 
"seconds", i.e., merchandise which fails to meet catalog standards.

Catalog Production.  The Company's catalogs are produced by an in-house 
art department which uses Macintosh desktop publishing equipment to prepare 
for both catalog and media, layouts, copy, typesetting and "mechanicals".
Independent photographers and models are engaged on a contract basis as 
needed. The Company believes this combination of in-house and free-lance staff 
enables it to maintain both quality control and flexibility in the production 
of its catalogs.  The Company's art department is located in its North Bergen,
New Jersey facility.

The Company varies the quantity of its catalogs mailed based on the 
selling season and the anticipated response rates.  In fiscal 1998, the 
Company produced three different editions of its Deerskin catalog and made 
11 mailings totaling approximately 3,800,000 catalogs.  The Deerskin catalog 
consists of between 56 and 84 pages and offers between 290 and 360 items. In 
fiscal 1998, the Company produced four editions of its Joan Cook catalog, and 
made 12 mailings totaling approximately 2,700,000 catalogs.  These Joan Cook 
catalogs consisted of 52 pages and each catalog offers approximately 300 
items.

Merchandising and Purchasing.  The Deerskin catalog offers a broad range of
leather merchandise priced from $8 to $995.  Many items have been 
available in the Deerskin catalog for years and each year new or redesigned 
items are added.

Many of Deerskin's items are manufactured in accordance with its design 
and specifications and imported directly by the Company.  Joan Cook offers a 
broad range of household items and gifts priced from under $10 to $200.  
Unlike Deerskin, Joan Cook's items are not generally designed or imported 
directly by the Company.  The Company also offers Deerskin and Joan Cook 
products through media advertising.  The Company endeavors to offer its 
customers outstanding selection, quality, value and service.

Deerskin's presently active products are manufactured by approximately 
125 suppliers.  In excess of 50% of the merchandise sold by Deerskin is
manufacturered in Hong Kong, India and the Peoples Republic of China.  
Products offered in Joan Cook catalogs are manufactured by hundreds of 
manufacturers. Unlike Deerskin, less than 10%, of the merchandise purchased for 
Joan Cook catalogs is purchased outside the United States. Joan Cook has 350 
suppliers. No one supplier accounted for more than 10% of the Company's 
purchases during the fiscal year ended April 30, 1998 and the Company believes 
ample alternate sources exist, should present supplier relationships be 
disrupted for any reason.

Marketing.  The Company believes its ability to segment, test and 
analyze mailing lists, and to select appropriate recipients for a particular 
mailing, are a significant factor in its business.  In general, the Company 
seeks to mail catalogs only to those list segments, at such times and 
frequencies as are expected to meet acceptable goals.  The Company maintains a 
proprietary customer data base which is used for statistical modeling purposes 
which, as of April 30, 1998, contained information with respect to 
approximately 4,500,000 customers.  In addition, the Company rents from and 
exchanges lists with other direct marketers in an attempt to gain new 
customers.

Order Fulfillment and Distribution.  Commencing in June 1998 customer 
orders are received and processed at the Company's facility in Carson City, 
Nevada. Data processing and most customer service operations are also 
conducted at this location.  Mail orders together with facsimile credit card 
orders are opened, compared to payments, and entered into the Company's computer
system. Telephone credit card orders are generally entered into the Company's 
computer system by the telephone customer representatives.  After obtaining 
authorization via teleprocessing for credit card orders, customer orders are 
processed and, if in stock, generally shipped within one business day.

All distribution and warehousing activities are conducted at the Carson 
City facility.  Merchandise is received directly from foreign and domestic 
vendors and inspected.  As a result, particularly with respect to Deerskin 
merchandise, many goods are identified as requiring pressing, minor finishing 
and/or repairs, which is performed in the Company's Carson City, Nevada 
facility.

As merchandise is received, the receiving department counts each item 
and verifies the quantity, and, if appropriate, the size and color of each 
item, against the purchase order displayed on the computer terminal.  A 
receiving report is printed and sent to the accounts payable department. The 
majority of the merchandise is then bar coded and placed on a particular shelf
in the warehouse, which location is tracked by the computer.  The computer 
system generates a bar coded picking ticket which is attached to each piece 
of merchandise.  These tickets help to minimize the effort required to fill
orders.  Orders are filled at packing stations where a packer chooses the
merchandise corresponding to the customer order displayed on the 
computer.  The packer then uses a bar code scanner which scans the information
on the picking ticket attached to the piece of merchandise into the computer 
system.  The computer compares such information to the customer order to ensure
that the merchandise being packed to fulfill the order is correct and 
complete.  Once the computer verifies that an order is correct and complete, 
the merchandise is packed with a bar coded shipping label attached.  The 
package is then delivered via automated conveyor to a shipping station where the
information on the shipping label is scanned to verify that the order is valid
and has not been previously shipped, and to record the method of shipment and to
create the shipping manifest.  While most orders are shipped via the Postal 
Service, the Company also offers express service to customers (guaranteed three
day delivery) for an additional fee.

Government Regulation.  The Company must comply with Federal, state and 
local laws affecting its business.  In particular, the Company is subject to 
Federal Trade Commission regulations governing its advertising and trade 
practices. While the Company believes it is in compliance with such 
regulations, in the event of non-compliance, it may be subject to cease and 
desist orders, injunctive proceedings, civil fines and other penalties.  To 
date, such governmental regulations have not had a material adverse effect on 
the Company.

The United States and the other countries in which the Company's products are
manufactured may, from time to time, impose new, or adjust, existing 
quotas, duties, tariffs or other restrictions, with the result that the 
Company's operations and its ability to continue to import merchandise at 
desired levels could be adversely affected.  The Company cannot now predict 
the likelihood of any such events occurring or the effect on its business of 
any such event.

Trademarks and Copyrights.  The Company has federally registered service
marks and logos for "Deerskin" and "Joan Cook".  In the opinion of the
management of the Company, the service marks "Deerskin" and "Joan Cook" 
are of significant value because of their market recognition as a result of 
many years of use and the significant quantity of catalogs circulated.

The Company also possesses other intangible rights such as copyrights 
and service marks on designs of its products, none of which individually is
material to the Company.

Employees.  As of April 30, 1998, the Company employed approximately 50
people, some of whom are part-time or seasonal employees.  None of the
Company's employees are covered by collective bargaining agreements.  The
Company considers its employee relations to be satisfactory.

Competition.  The mail order business is highly competitive.  The 
Company is not aware of any other mail order catalogs devoted primarily to the 
sale of leather goods.  There are, however, a number of mail order catalogs 
which sell housewares and gifts.  The Company competes primarily with other 
mail order catalogs and secondarily with retail stores, including specialty 
shops and department stores.  The Company believes that proper selection of 
merchandise, offering the customer the opportunity to purchase such 
merchandise at favorable prices and providing the customer with prompt, reliable
and courteous service, are major factors in the successful operation of a mail
order business.  There can be no assurance that the Company will be able to 
consistently select appropriate merchandise or offer such merchandise at 
favorable prices.  Many of the Company's competitors have substantially greater
financial resources than the Company.

Item 2. Description of Property.

The Company's operations are conducted in the following facilities:

Location Use

Carson City, Nevada Principal Executive Offices; Order Entry,   Data
Processing; Distribution and Warehousing

North Bergen, New Jersey Administrative Offices; Merchandising;    
Purchasing; Catalog Production

Danvers, Massachusetts Retail Close-Out Store

The Company owns an approximately 81,000 square foot building on 7.5 
acres of leased land in Carson City, Nevada.  Annual rent for this land is 
$700.  The lease expires on September 30, 2037.  The Company is responsible for
real estate taxes on this property.  In addition to housing the Company's 
principal executive offices, this facility is used for distribution and 
warehousing.

The Company leases an 11,000 square foot facility located in North 
Bergen, New Jersey.  The Company's administrative offices, merchandising, 
purchasing and catalog production departments are now located in this 
facility.  Annual gross rent, including utilities, repairs and taxes, for the
North Bergen facility approximated $115,000.  This lease expires in November
1998.

The Company owns a 45,000 square foot, three-story building in Peabody,
Massachusetts which is held for resale.

The Company owns a 20,000 square foot building on leased land in 
Danvers, Massachusetts.  Annual rent for this land is $12,600.  This lease 
and options contained therein expire on March 31, 2000.  The Company is 
responsible for real estate taxes on this land.  This facility is used as a 
retail close-out store.

The Company considers that, in general, its physical properties are well
maintained, in good operating condition and adequate for its present 
purposes.

Item 3. Legal Proceedings.

As of July 23, 1998 there were no legal proceedings pending against the
Company, nor, to the Company's knowledge, were any material proceedings 
against it contemplated by any governmental authority.

Item 4. Submission of Matters to a Vote of Security Holders

During the fourth quarter of the fiscal year ended April 30, 1998, no 
matters were submitted to a vote of security holders.

                                    PART II

Item 5. Market for Registrant's Common Equity and Related
        Stockholder Matters.

  (a) Market Information.  The Company's Shares are traded under the 
symbol "INTO" on NASDAQ. The following table indicates high and low bid for 
the fiscal years ended April 30, 1998 and 1997 in the over-the-counter market 
for the periods indicated based upon information supplied by National 
Quotation Bureau.  Such over-the-counter market quotations reflect inter-dealer
prices, without retail mark-up, mark-down or commission and may not necessarily
represent actual transactions:

        Fiscal Year Ended  April 30, 1998       April 30, 1997
                                Bid:                 Bid:
                           High    Low          High     Low
  First Quarter            2 5/8   1 1/16       2 1/8    1 5/8
  Second Quarter           2 11/16 2 1/8        2 1/8    1 1/2
  Third Quarter            3 1/16  1 3/4        2        1 1/2
  Fourth Quarter           2 15/16 1 11/16      1 7/8    1 1/8

 (b)  Number of Holders of Common Stock.  As of April 30, 1998 the number 
of record holders of the Company's Shares was approximately 300, which does 
not include individual participants in security position listings.

 (c)  Dividends.  The Company has never paid a cash dividend.  Future 
dividend policy will be determined by the Board of Directors based on the 
Company's earnings, financial condition, capital requirements and other 
existing conditions.  It is anticipated that cash dividends will not be paid to
the holders of Shares in the foreseeable future.

Item 6. Management's Discussion and Analysis of Financial Condition and 
        Results of Operations

Management's Discussion and Analysis of Financial Condition and Results 
of Operations, follow page 14.

Item 7. Financial Statements.

Financial Statements, follow page 19.

Item 8. Changes in and Disagreements with Accountants on Accounting and
        Financial Disclosure.

During fiscal years 1998 and 1997 there were no changes in or disagreement
with the Company's principal independent accountant on accounting or 
financial disclosure.

                                  PART III

Item 9. Directors and Executive Officers of the Company

  The Company's Board of Directors is a classified board, with one-third 
of the directors being elected each year for a term of three years.  The 
following table sets forth certain information with respect to each director
and executive officer of the Company:

Name and Age              Positions with              Term          Served As
                          the Company                Expires        Director 
                                                                    Since

Daniel A. DeStefano, 66 Chairman of the Board,        1999           1969
                        Director

Martin Fox, 63          President, Secretary,
                        Director                      1999           1978

Michael Bandler, 48     Chief Financial Officer,
                        Director                      2001           1998

James J. Holzinger,* 60 Director                      2001           1998

Robert Lerman, 63       Director                      2000           1998

There is no family relationship among any of the directors or executive
officers of the Company.

Mr. DeStefano was a founder of the Company and has been Chairman of the 
Board of the Company since 1969.

Mr. Fox joined the Company in 1972 and has been President of the 
Company for more than five years.

Mr. Holzinger is, since 1996, retired.  From 1993 - 1996, he was an 
Executive Vice President in the commercial lending department of Summit Bank.

Mr. Lerman became a Director in February, 1998. Since 1998, he has been
president and a Director of Pioneer Ventures Corp. which is the manager 
of the general partner of Pioneer Ventures Associates Limited Partnership.  
Mr. Lerman is also the President and a Director of Pioneer Partners Corp., 
the general partner of an investment partnership, Bridge Investors I Limited 
Partnership for more than five years.

Mr. Bandler became a Director of the Company in October, 1997.  He was
appointed Chief Financial Officer in March, 1998.  He is a Certified 
Public Accountant and for more than five years has been President of Michael 
Bandler & Company, a consulting firm.

Each officer's term expires at each annual meeting of the Board of 
Directors of the Company, or when their successors are elected and qualified 
to serve in their stead.

The Company pays directors, other than full time employees, an annual
retainer of $3,000 plus $500 and out-of-pocket expenses for each Board 
meeting attended.

  * Mr. Holzinger is finishing the term of Mr. Phillip Langsdorf who 
resigned
as of July 10, 1998.

Item 10. Executive Compensation.

  The following table sets forth the cash compensation (consisting 
entirely of salary) paid (or accrued for) by the Company to its President and 
Chairman of the Board, the only two executive officers whose aggregate 
remuneration exceeded $100,000, for the Company's fiscal years ended April 30, 
1998, 1998 and 1996:

SUMMARY COMPENSATION TABLE

Name and
Principal
Position                 Year Annual Compensation

Martin Fox, President    1998     $1,500
                         1997     $1,500
                         1996   $114,000

Daniel DeStefano,        1998     $1,500
Chairman of the Board    1997     $1,500
                         1996   $100,800

  During the fiscal year ended April 30, 1996 the Company granted to Mr. 
Fox and Mr. DeStefano options, exercisable immediately and expiring in five 
years, to each purchase 125,000 shares of the Company's common stock at $2.00 
per share.  Such options were terminated and cancelled as of March 25, 1998, 
and on that date the Company granted 250,000 stock options each to Mr. Fox and 
Mr. DeStefano at an exercise price of $1.95 pursuant to the Company's 1996 
Employee Stock Option Plan. These options are immediately exercisable to the 
extent of 20% with an additional 20% exercisable on March 25 each subsequent 
year. Neither Mr. Fox nor Mr. DeStefano had any other outstanding stock options 
or stock appreciation rights.  Furthermore, neither of them received awards 
under long-term incentive plans that are stock based during the three fiscal 
years referred to above.

The Company does not have employment agreements with any of its executive
officers.

The Company has two stock option plans, the 1991 Stock Option Plan (the 
"1991 Plan") and the 1996 Stock Option Plan (the "1996 Plan").

No further grants will be issued under the 1991 Plan.  At April 
30, 1998, 42,500 options were outstanding exercisable with respect to the 
1991 Plan.

Pursuant to the 1996 Plan, 500,000 shares were made available for the 
grant of stock options.  The awards can take the form of Incentive Stock 
Options ("ISOs") or Non-qualified Stock Options (NQSOs") and may be granted to
key employees, directors and consultants, with terms not to exceed ten years.
Options granted under this Plan vest 20% immediately upon grant, with an
additional 20% vesting on each subsequent anniversary of the grant date, 
or as  set forth by the Board of Directors.  Options may be exercised in whole 
or in part.  The exercise price of the ISOs is the market price of  the 
Company's common stock on the date of grant and has ranged from $1.75 to 
$2.75 per share. The exercise price of NQSOs shall be determined by the board
of directors whengranted.  Any plan participant who is granted ISOs and 
possesses more than 10% of the voting rights of the Company's outstanding 
common stock must have an option price of at least 110% of the fair market value
on the date of grant and the option must be exercised within five years from 
the date of grant.  At April 30, 1998, 86,777 options were exercisable under 
the 1996 Plan.

As of April 30, 1998, options to purchase 604,442 shares of the 
Company's Common Stock at prices ranging from $1.75 to $1.95 were outstanding
under the 1996 Plan.

Item 11. Security Ownership of Certain Beneficial Owners and Management.

Security Ownership of Certain Beneficial Owners.  The following table 
sets forth, as of July 15, 1998, information concerning the only persons who 
are known by the Company to own beneficially more than five percent of the
outstanding Shares of the Company and information concerning ownership of
outstanding Shares by all current directors and executive officers of the
Company as a group.  Except as otherwise indicated, all such persons have 
both sole voting and investment power over the Shares shown as being 
beneficially owned by them.

Name and Address of           Amount and Nature               Percent of
Beneficial Owner              Of Beneficial Ownership             Class

Martin Fox
2500 Arrowhead Drive
Carson City, Nevada 89706                1,459,588 (1)            30.2%

Daniel A. DeStefano
2500 Arrowhead Drive
Carson City, Nevada 89706                  920,010 (2)            19.0%

DeStefano Children Trust
c/o John McConeghy
42 Sterling Lane
Wayne, New Jersey 07470                    530,546 (3)            11.1%

Melvyn I. Weiss
One Pennsylvania Plaza
New York, New York 10119                   283,650 (4)             5.9%

Pioneer Ventures Associates              1,000,000 (5)            17.3%
  Limited Partnership
651 Day Hill Road
Windsor, Connecticut 06095

Robert Lerman                            1,019,895 (6)            17.6%
651 Day Hill Road
Windsor, Connecticut 06095

All Executive Officers and
Directors as a Group (5 persons)         3,459,493 (5)            58.8%


 (1) This amount includes 136,984 Shares owned by trusts for the benefit 
of Mr.Fox's children of which Mr. Fox is a trustee and of which Mr. Fox 
disclaims beneficial ownership.  Mr. Fox has shared voting and investment 
power over the Shares owned by such trusts.  This amount also includes 128,578
Shares owned by the Martin Fox Retirement Trust.  This amount does not 
include 53,433 Shares owned by a trust for the benefit of unrelated persons of 
which Mr. Fox is a trustee and of which Mr. Fox disclaims beneficial ownership.
This amount also includes 50,000 shares which Mr. Fox has the right to acquire 
pursuant to a currently exercisable stock option.

(2) This amount includes 112,138 Shares owned by the Daniel DeStefano
Retirement Trust. This amount also includes 50,000 shares which Mr. 
DeStefano has the right to acquire pursuant to a currently exercisable stock 
option.

(3) Owned by the DeStefano Children Trust for the benefit of Mr. 
DeStefano's adult children, of which the trustees are Messrs. John McConeghy 
and Fred DeStefano (Mr. Daniel A. DeStefano's brother).

(4) This amount also includes 136,984 Shares owned by trusts for the 
benefit of Mr. Fox's adult children of which Mr. Weiss is a trustee and of 
which Mr.Weiss disclaims beneficial ownership.  Mr. Weiss has shared voting 
and investment power over the Shares owned by such trusts.

(5) Pioneer Ventures Associates Limited Partnership is the owner of a
$3,000,000 convertible subordinated debenture which is convertible into a
maximum of 1,000,000 shares of the Company's common stock.

(6) This amount includes 1,000,000 shares which may be acquired by 
Pioneer Ventures Associates Limited Partnership upon conversion of the 
convertible Subordinated Debenture due May 1, 20003, (ii) 4,400 shares held by 
Robert and Ellen Lerman, (iii) 1,960 and 3,500 shares held by Texas 
Enterprises, Inc.. and Pioneer Capital Corp., respectively, of which Mr. Lerman
is the owner of 50% of the issued shares of such corporations, (iv) 9,935 
shares held by the Robert A. Lerman Money Pension Plan & Trust, and (v) 100 
shares held by Ellen Lerman, his wife.  See "Certain Relationships and Related
Transactions."

(7) See footnotes (1), (2) and (6) above.  This amount includes 10,000 
shares owned by Mr. Holzinger. This amount also includes 5,000 shares which 
Mr. Bandler, a Director and Chief Financial Officer of the Company has the 
right to acquire pursuant to a currently exercisable stock option.

Item 12. Certain Relationships and Related Transactions

On February 25, 1998, the Company entered into the Debenture Commitment
Agreement with Pioneer Ventures Associates Limited Partnership ("PVALP")
pursuant to which PVALP has agreed to make certain loans to the Company 
to be repaid by the Company in accordance with the terms of convertible 
subordinated debentures (the "Debentures").  PVALP has initially loaned 
$3,000,000 to the Company and the Company has issued the First Subordinated 
Debenture due May 1, 2003 (the "First Debenture").

The terms of the First Debenture include the condition that the 
principal stockholders of the Company (the "Principal Stockholders"), which 
include Mr. DeStefano and Mr. Fox, enter into the Voting Agreement.

The Voting Agreement provides that so long as there is any unpaid 
principal amount or interest outstanding under the Debentures or so long as 
the conversion shares  are held by PVALP, the Principal Stockholders will 
vote all of their Common Stock for the election of PVALP's designee as a 
director of the Company.  Mr. Robert Lerman, a director of the Company is 
PVALP's nominee, and the President of Pioneer Ventures Corp., the managing 
member of the general partner of PVALP.  In addition, in the event of a default
under the Debenture Commitment Agreement, the Principal Shareholders agree to 
elect that number of nominees to the Board of directors designated by PVALP 
such that the Board of Directors becomes comprised of a majority of nominees of
PVALP.  The Principal Shareholders also agree to vote in favor of the PVALP 
nominees so long as any interest or principal remains unpaid.

The Voting Agreement also provides that the Principal Shareholders may 
not transfer any Common Stock to any affiliate without PVALP's prior written
consent.  "Affiliate" is defined in the Voting Agreement as (a) any 
spouse, parent, parent-in-law, grandparent, grandchild, sibling, uncle, aunt,
niece, nephew or first cousin of the transferor or (b) any person which the 
transferor directly or indirectly controls or (c) any transfer to a person if
the transferor remains a beneficial owner, as that term is used in Section 13
(d) of the Securities Exchange Act of 1934, as amended, of the transferred 
shares.

Item 13. Exhibits and Reports on Form 8-K.

(a) Exhibits.  See Index of Exhibits annexed hereto.

      (b) Reports on Form 8-K

The Company did not file any Current Reports on Form 8-K during the 
quarterly period ended April 30, 1998.


                                  SIGNATURES


 Pursuant to the requirements of Section 13 or 15(d) of the Securities 
Exchange Act of 1934, the Registrant has duly caused this report to be 
signed on its behalf by the undersigned, thereunto duly authorized.

Date:  8/13/98                     INITIO, INC.


                                   /s/ Martin Fox
                                   ---------------------------
                                   By:   Martin Fox, President


Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.


Date:  8/13/98                     /s/ Martin Fox
                                   ----------------------
                                   Martin Fox,
                                   President and Director


Date:  8/13/98                     /s/ Daniel DeStefano
                                   ----------------------
                                   Daniel DeStefano,
                                   Chairman of the Board
                                   and Director


Date:  8/13/98                     /s/ Michael Bandler
                                   ----------------------
                                   Michael Bandler,
                                   Treasurer, Chief Financial
                                   Officer and Director


Date:  8/13/98                     /s/ Robert A. Lerman
                                   -----------------------
                                   Robert A. Lerman,
                                   Director


Date: 8/13/98                      /s/ James J. Holziner
                                   -----------------------
                                   James J. Holzinger,
                                   Director









                            INDEX OF EXHIBITS


(3) (a) Articles of Incorporation of the Company -- incorporated by 
reference to Exhibit 3(a) to the SB2.

 (b) By-Laws of the Company -- incorporated by reference to Exhibit 3(b) 
to the SB-2.

 (c) Certificate of Ownership and Merger of Initio, Inc., a Delaware
corporation and Initio, Inc., a Nevada corporation (the "Company") --
incorporated by reference to Exhibit 2(e) to the SB-2.

(10) (a) 1991 Stock Option Plan, adopted by the Board of Directors on 
November 8, 1991 and by the shareholders on December 20, 1991 -- incorporated 
by reference to Exhibit 10(a) to the SB-2 (This document represents a 
compensatory plan).

 (b) Sublease from Julie Pomerantz, Inc. to Deerskin Trading Post, 
Inc.,dated as of April 18, 1994, relating to premises located at 2001 
Tonnelle Avenue, North Bergen, New Jersey, guaranteed by the Company.

 (c) Lease of Land under the Company's premises at 2500 Arrowhead Drive, 
Carson City, Nevada -- incorporated by reference to Exhibit No. (20)(b) to 
the Company's Annual Report on Form 10-K for the fiscal year ended February 
6, 1981.

 (d) Lease for premises located at Route 1 and Route 114, Danvers,
Massachusetts -- incorporated by reference to Exhibit 10(d) to the SB-2.

 (e) Loan Agreement dated March 20, 1996 between The Company and Sierra 
Bank of Nevada -- incorporated by reference to Exhibit 10(w) to the Company's 
Annual Report on Form 10-KSB for the fiscal year ended April 30, 1996

 (f) Eleventh Amendment to Line of Credit and Loan Security Agreement, 
dated as of March 15, 1998, between United Jersey Bank and Deerskin Trading 
Post, Inc.

 (g) Third Restated Promissory Note, dated as of March 15, 1998, between 
United Jersey Bank and Deerskin Trading Post, Inc.

 (h) Fourteenth Amendment to Line of Credit Loan and Security Agreement, 
dated as of January 31, 1998, between Summit Bank and Deerskin Trading Post, 
Inc.

 (i) 1996 Stock Option Plan

 (j) Debenture Commitment Agreement, dated as of February 25, 1998, by and
between the Company and PVALP incorporated by reference to Schedule 13D 
dated February 25, 1998 filed by Martin Fox.

 (k) Convertible Subordinated Debenture due May 1, 2003 incorporated by
reference to Schedule 13D dated February 25, 1998 filed by Martin Fox

 (l) Voting Agreement, dated as of February 25, 1998, by and between 
PVALP and the Principal Stockholders incorporated by reference to Schedule 13D 
dated February 25, 1998 filed by Martin Fox.


(21)  List of Subsidiaries -- incorporated by reference to Exhibit 21 to the 
SB-2.



                                Initio, Inc.

Management's Discussion and Analysis of Financial Condition and the 
Results of Operations

The following discussion and analysis provides information which 
management
believes is relevant to an assessment and understanding of the Company's
results of operations and financial condition. The discussion should be 
read in
conjunction with the Company's Financial Statements and Notes thereto.

Management's discussion and analysis contains " forward looking 
statements "
about the Company's future prospects. These statements are subject to 
risks and
uncertainties which could cause actual results to differ materially from 
those
expected by Management. Reader's are therefore cautioned not to rely upon 
on
any such forward looking beliefs or judgments in making investment 
decisions.

Results of Operation

Gross Shipments, declined in each of the significant areas of the 
Company's
business.

                  Year Ending       Year Ending                      
Gross Shipments   April 30th, 1998  April 30th, 1997    Change        % Change
 Deerskin Catalog $ 7,706,504         $ 8,196,813        ($  490,309)  ( 6.0 )
 Joan Cook Catalog  3,128,670           3,289,374         ( 160,704 )  ( 4.9 )
 Media Advertising  1,143,638           1,532,040         ( 388,402 )  ( 25.4 )
 Retail Closeout      363,873             470,073         ( 106,200 )  ( 22.6 )
 Other                361,860             255,095           106,765      41.8
                  -----------           ---------         ----------
    Total        $ 12,704,545         $13,743,395     ( $ 1,038,850 )   (7.5 )

Deerskin catalog circulation was reduced approximately 15 %, to 3,801,000 
books this season from 4,470,00 last year, while average response rates 
increased approximately 10 % to $2,080 per thousand catalog mailed. Management 
believes that this year's result was limited by an unusually warm winter in 
many partsof the country.

Joan Cook catalog circulation was increased approximately 2.7 % books this
season to  2,737,000 books from 2,666,000 last year while average response
rates declined approximately 6.4 % to $ 1,130 per thousand catalogs 
mailed. Response rates of external lists were particularly adverse.

Media circulation was materially curtailed when results in October and 
November 1997 were little better than breakeven. This trend worsened in 
January, 1998. The decline in retail closeout gross sales reflects the absence
of a second outlet in the current period, a bulk sale of shoes in the earlier 
year and the continuation of a long term decline in the Danvers store's results.
The other category includes list rental income, which increased $ 33,000 or 
26.5 % and sales to a supplier who began their own catalog, which increased 
$ 73,000 or 56.6 %. The Company has since determined that its' participation 
in the suppliers catalog did not meet acceptable profitability standards and 
has terminated the relationship.

The Company is having constructed an Internet store at this time and
anticipates the commencement of significant e - commerce in time for this
season's primary selling period.

Customer refunds decreased $ 82,877, or 5.0 %, in the current period but
increased as a percentage of relevant shipments  to  12.4%.
                 Year Ending            Year Ending                     %
Refunds          April 30th, 1998      April 30th, 1997    Change    Change
Deerskin Catalog $ 1,298,835           $ 1,361,538    (  $ 62,703 ) (4.6 )
Joan Cook Catalog    184,871               176,703          8,168    4.6
Media Advertising     57,886                74,102       ( 16,216   (21.9 )
Retail Closeout       29,409                41,535       ( 12,126 ) (29.2 )
Total            $ 1,571,001           $ 1,653,878    (  $ 82,877 )  (5.0 )

                                    Year Ending             Year Ending
Refunds as a % of Shipments         April 30th, 1998        April 30th, 1997
Deerskin Catalog                            16.8               16.6
 Joan Cook Catalog                           5.9                5.4
 Media Advertising                           5.1                4.8
 Retail Closeout                             8.1                8.8
              Average                       12.4               12.1

As a consequence of the foregoing, the Company's Net Sales declined  $955,973,
or 7.9 %.

                    Year Ending         Year Ending                      %
Net Sales           April 30th, 1998    April 30th, 1997  Change      Change
 Deerskin Catalog   $ 6,407,669         $ 6,835,275     ($427,606 )   (6.3 )
 Joan Cook Catalog    2,943,799           3,112,671     ( 168,872 )   (5.7 )
 Media Advertising    1,085,752           1,457,938     ( 372,186 )   (5.4 )
 Retail Closeout        334,464             428,538     (  94,074 )  (21.9 )
 Other                  361,860             255,095       106,765     41.8
    Total          $ 11,133,544        $ 12,089,517 (  $  955,973 )   (7.9 )

Merchandise cost declined $ 80,186, or 1.7 %, but increased as a percentage of
Net Sales to 41.6 % from 39.0% in the earlier period. In anticipation of a
liquidation of the Danvers retail store inventory, the Company has included
in merchandise a $ 564,000 charge this year. Mitigating this increase has 
been a change in the Company's approach to pricing new catalog products, 
resulting in increased margins and the reduction in minimal margin retail 
closeout sales.

Advertising Costs declined $ 174,002, or 4.2 %, Company wide entirely 
because of the decreased circulation of and increased response rates of the 
Deerskin catalog.

                         Year Ending       Year Ending                 %
Advertising costs        April 30th, 1998  April 30th, 1997  Change     
Change
 Deerskin Catalog        $ 1,950,821       $ 2,249,204    ( $ 298,383)(13.2 )
 Joan Cook Catalog         1,353,149         1,252,336        100,813   8.0
 Media Advertising           566,325           551,042         15,283   2.7
 Retail Closeout              56,466            48,181          8,285  17.1
    Total               $  3,926,761      $  4,100,763  (  $  174,002) (4.2 )



                             Year Ending            Year Ending
Advertising costs, as a      April 30th, 1998       April 30th, 1997
   % of Net Sales
   Deerskin Catalog               30.4                    32.9
 Joan Cook Catalog                46.0                    40.2
 Media Advertising                52.2                    37.8
 Retail Closeout                  16.8                    11.2
        Overall                   35.3                    33.9

Fulfillment, General and Administrative increased  $ 130,287, or 3.6 % in 
the current period. Several, unusual events are the cause of this change.  In 
May, 1998, the Company closed its Peabody operation, transferring all 
fulfillment processing  to Carson City. Exit costs from Peabody, as well as 
startup costs in Carson City,  have been charged to this year's operations. 
Also, in the current period the Company reduced its mail order inventories 
causing previously deferred purchasing, processing and warehouse costs  
approximating $120,000 to be charged to operations in the fulfillment, general
and administrative category.

Net Interest expense decreased in the later period, reflecting lower
merchandise inventory levels, and hence lower bank borrowings. Gains from 
the sale of marketable increased and the Company realized a gain when a 
purchaser of the Peabody property failed to consummate the transaction and 
forfeited their deposit.


Liquidity and Financial Resources

In February, 1998, the Company issued $ 3,000,000 principal amount of a 
five year, 8 % debenture which is convertible into the Company's common stock 
at $ 3.00 per share. The Company also obtained a commitment for an additional
$2,000,000 to be used for specified purposes including Internet activities.

In the current period, through careful planning, the Company reduced 
inventory levels and as a result bank borrowings. In February, 1998, the 
Company completed repayment of its short term borrowings with a portion of 
the proceeds from the issuance of the subordinated debenture. The Company has 
obtained a new bank facility to permit the issuance of letters of credit for 
import purposes.

At April 30th, 1998, the Company's cash balances were $ 2,249,000 and
marketable securities, valued at current market prices, stood at more 
than $1,073,000. At the same time, the Company's entire current liabilities 
were $430,000.

It is Management's belief that the Company now has available adequate
resources, to conduct its operations, in the coming fiscal year.


Year 2000 Compliance

The Company is presently in the process of evaluating its information
technology for the Year 2000 Compliance. The Company does not expect that 
the cost of modification, will be material to the results of operation or 
financial condition of the Company. The Company does not anticipate any 
material disruption in its operations because of failure of Year 2000 
Compliance, and has yet to make inquiry of its significant suppliers or 
financial institutions.


REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS





To the Board of Directors and Stockholders of Initio, Inc.:

We have audited the accompanying consolidated balance sheets of Initio, 
Inc. (a Nevada corporation) and subsidiaries as of April 30, 1998 and 1997, 
and the related consolidated statements of operations, stockholders' equity 
and cash flows for the years then ended.  These financial statements are the
responsibility of the Company's management.  Our responsibility is to 
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are 
free of material misstatement.  An audit includes examining, on a test basis, 
evidence supporting the amounts and disclosures in the financial statements.  
An audit also includes assessing the accounting principles used and 
significant estimates made by management, as well as evaluating the overall 
financial statement presentation.  We believe that our audits provide a 
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present 
fairly, in all material respects, the financial position of Initio, Inc. and 
subsidiary as of April 30, 1998 and 1997, and the results of their operations 
and their cash flows for the years then ended in conformity with generally 
accepted accounting principles.





July 22, 1998



Arthur Andersen LLP
New York, New York







                                   Initio, Inc.
                     Consolidated Statement of Operations
                                For the Year Ended

                              30-Apr-98      30-Apr-97

Net Sales                    11,133,544     12,089,517

Costs and Expenses
  Merchandise                 4,632,363      4,712,549
  Advertising                 3,926,761      4,100,763
                              ---------      ---------
                              8,559,124      8,813,312
                              ---------      ---------
                              2,574,420      3,276,205
  Fulfillment, General and
   Administrative             3,703,682      3,573,375
                              ---------      ---------
     Operating Loss          (1,129,262)      (297,170)

Other Income ( Expense )
  Interest Income                62,042         43,168
  Interest Expense             (284,378)      (320,870)
  Gain on the Sale              498,752        443,685
   of Marketable Securities
  Other                          48,257          7,000
                                -------        -------
                                324,673        172,983
                                -------        -------

 Net Loss                      (804,589)      (124,187)
                                =======        =======

Loss per Common Share
 Basic                           ($0.17)        ($0.03)
 Diluted                         ($0.17)        ($0.03)

Weighted Average Shares
 Basic                        4,842,737      4,681,280
 Diluted                      4,842,737      4,681,280


 The accompanying notes are  an integral part of these financial 
statements.



                                   Initio, Inc.
                         Consolidated Balance Sheets
                                     As at

                                30-Apr-98     30-Apr-97

Assets

Current Assets
  Cash                         $2,249,992      $300,361
  Marketable Securities         1,073,308       636,072
  Inventory                     1,790,259     3,247,405
  Prepaid Advertising             228,192       360,597
  Property Held for Sale          324,953       324,953
  Other Current Assets            460,364       680,948
                                ---------     ---------
    Total Current Assets        6,127,068     5,550,336


Property and Equipment          3,018,171     2,947,327
  Less;Accumulated Depreciation 1,266,561     1,116,178
                                ---------     ---------
    Net Property and Equipment  1,751,610     1,831,149


Customer List                   1,462,872     1,462,872
  Less; Accumulated Amortization  192,003       155,430
                                ---------     ---------
     Net Customer List          1,270,869     1,307,442


Other Assets                       95,454        12,174

       Total Assets            $9,245,001    $8,701,101
                                =========     =========




 The accompanying notes are an integral part of these financial 
statements.



                                  Initio, Inc.
                         Consolidated Balance Sheets
                                    As at

                                          30-Apr-98        30-Apr-97

Liabilities and Stockholders' Equity

Current Liabilities
  Short Term Debt                                $0       $1,850,000

  Accounts Payable                          171,498          458,515
  Customers' Unshipped Orders                34,121           38,152
  Accrued Expenses and Other
   Current Liabilities                      224,966          154,794
                                            -------        ---------
    Total Current Liabilities               430,585        2,501,461

Mortgage Payable                            874,105          914,092
Subordinated Convertible Debenture        3,000,000                0

Commitments ( see accompanying notes )

Stockholders' Equity
  Common Stock, $ .01 par value, Authorized
   10,000,000 shares, issued  5,271,935 and
   5,081,535 shares respectively             52,719           50,815
  Additional Paid In Capital              8,876,678        8,682,183
  Accumulated Deficit                    (3,925,537)      (3,120,948)
  Unrealized Gain on Marketable Securities  514,406          150,279
                                          ---------        ---------
                                          5,518,266        5,762,329
  Less; Treasury Stock, 429,398 and 391,871
   shares respectively                      577,955          476,781
                                          ---------        ---------
     Total Stockholders' Equity           4,940,311        5,285,548

     Total Liabilities and Stockholders' 
     Equity                              $9,245,001       $8,701,101
                                         ==========        =========

 The accompanying notes are  an integral part of these financial 
statements.


                                      Initio, Inc.
                   Consolidated Statement of Stockholders' Equity
                                                             Unrealized
                             Additional                      Gain On
                     Common  Paid In  Accumulated  Treasury  Marketable
                      Stock  Capital  Deficit        Stock   Securities 
Total
Balance April 30, 
 1996                50,715 8,670,283 (2,996,761) (476,781)  5,714 5,253,170

Issuance of  10,000
  Common Shares to      100    11,900                                 12,000
  Directors

Unrealized Gain                                            144,565   144,565

Net Loss                                (124,187)                   (124,187)
                     ------ ---------  ---------   -------  ------- ---------
Balance April 30, 
 1997                50,815 8,682,183 (3,120,948) (476,781)150,279 5,285,548

Issuance of 60,000 Common
  Shares to 
  Employees             600    65,400                                 66,000

Exercise of Employee Stock
  Options for 130,400 Common
  Shares              1,304   129,095                                130,399

Repurchase of 37,527 Common
Shares from Employees                             (101,174)         (101,174)

Unrealized Gain on Marketable
 Securities                                                364,127   364,127

Net Loss                                 (804,589)                  (804,589)
                     ------ ---------   ---------  ------- ------- ---------
Balance April 30, 
 1998                52,719 8,876,678  (3,925,537)(577,955)514,406 4,940,311
                     ====== =========   =========  ======= ======= =========

 The accompanying notes are an integral part of these financial statements.


                                      Initio, Inc.
                         Consolidated Statement of Cash Flows
                                                 For the Year Ended
                                              30-Apr-98      30-Apr-97

Cash Flows from Operating Activities;

  Net Loss                                    ($804,589)     ($124,187)
  Depreciation and Amortization                 186,956        211,168
  Compensation Paid with Common Stock            60,000         12,000
  Gain on the Sale of Marketable Securities    (498,752)      (443,685)
  Decrease ( Increase ) in Current Assets
    Inventory                                 1,457,146        493,463
    Prepaid Advertising                         132,405       (122,760)
    Other Current Assets                        180,584        (44,710)
  Increase ( Decrease ) in Current Liabilities
    Accounts Payable                           (287,017)        41,477
    Customers' Unshipped Orders                  (4,031)       (26,662)
    Accrued Expenses and Other Current
     Liabilities                                 70,172        (29,416)
                                                -------         ------
       Net Cash Provided By ( Used In )
        Operating Activities                    492,874        (33,312)

Cash Flows from Investing Activities
  Purchase of Property and Equipment            (70,844)       (15,074)
  Net Proceeds from Marketable Securities       425,646        673,416
                                                -------        -------
       Net Cash Provided By
         Investing Activities                   354,802        658,342

Cash Flows from Financing Activities
  Net Repayment of Short Term Debt           (1,850,000)      (750,000)
  Debenture Proceeds                          3,000,000              0
  Debenture Costs                               (43,280)             0
  Mortgage Repayment                            (39,987)       (36,587)
  Sale of Common Stock, Net of Treasury
   Stock Repuchase                               35,222              0
                                              ---------        -------
      Net Cash Provided By ( Used In )
       Financing Activities                   1,101,955       (786,587)

Net Increase ( Decrease ) in Cash             1,949,631       (161,557)
Cash at Start of Year                           300,361        461,918
                                              ---------        -------
Cash at End of Year                          $2,249,992       $300,361
                                              =========        =======

Cash Paid for Interest                         $284,378       $320,870
                                                =======        =======

 The accompanying notes are an integral part of these financial statements.


                                    Initio, Inc.
                 Notes to the Consolidated Financial Statements

1. Summary of Significant Accounting Policies

Nature of Business
Initio, Inc., (the " Company "),  through its wholly owned subsidiary, 
Deerskin Trading Post, Inc. (" Deerskin "), markets leather goods by way of 
the Deerskin catalog and gifts and housewares through its' Joan
Cook catalog. The Company also promotes its products through media advertising
and has operated a retail closeout outlet. The Company's business is highly
seasonal with increased sales in November and December.

Basis of Presentation
The consolidated financial statements include the accounts of the Company 
and Deerskin. All intercompany items have been eliminated.

Use of Estimates
The preparation of financial statements in conformity with generally 
accepted accounting principles requires management to make estimates and 
assumptions that affect the reported balances in the financial statements. 
Actual results can and do differ from management's best estimates.

Revenue Recognition
Revenue is realized at the time of shipment to customers. Payments for 
orders not yet shipped are reflected as Customers' Unshipped Orders, a current
liability. As Revenue is recognized, customer returns are provided for 
based upon the Company's historical experience.

Advertising Recognition
Advertising costs of non test programs, including only incremental direct 
costs with independent third parties and payroll and payroll related costs of
employees who are directly associated with advertising, are initially 
deferred. Catalog costs are amortized based upon anticipated revenue flows. 
Media costs are expensed to the extent of gross profit generated and make no 
contribution until costs are fully recovered. Test costs are expensed as 
incurred. The Company continually monitors its' prepaid advertising, making 
write downs, on a program by program basis, as required.

Inventory
Merchandise inventory is valued at the lower of cost or market, using the
first-in, first-out method. Purchasing, preparation and storage costs of 
the mail order inventory, calculated on a percentage basis, are deferred 
until the inventory is sold.

Property and Equipment
Fixed assets are recorded at cost and then depreciated, using the 
straight line method over their estimated useful lives, which generally 
approximates 40 years for buildings and 3 to 10 years for equipment. Leasehold
improvements are amortized over the lesser of their useful lives or the 
remaining lease terms. Disposed of and retired assets are removed from the
accounts of the Company, as are fully depreciated assets.

Customer Lists
The Company assigns no value to internally generated customer lists. 
However, the customer list acquired as part of the Joan Cook acquisition is 
being amortized over 40 years on a straight line basis.

Stock Based Compensation
The Company has elected to continue to account for its' stock based
compensation of employees, using the intrinsic value approach,  pursuant 
to APB No. 25. However, the  Company makes proforma disclosure of net income 
and earnings per share as if the fair value method of accounting for stock 
based compensation had been adopted.

Loss Per Common Share
In accordance with the Statement of Financial Standards ( " SFAS " ) No. 
128, "Earnings per Share ", adopted  by  the  Company   as  at  April 30th, 
1998, and applied retroactively April 30th, 1997 results, Basic  Loss  per  
Common Share, as well as Diluted Loss Per Common Shares has been computed 
based upon the weighted average number of actually outstanding shares of the 
Company's common stock. Inclusion of outstanding employee stock options and 
the Company's convertible debenture would have had an antidilutive effect in 
both periods and therefore have been excluded from the calculations.

Long Lived Assets
It is the Company's policy to record long lived assets, both tangible and
intangible, at cost and to spread that cost over the useful life of the 
assets. These assets are reviewed periodically for impairment, giving due 
consideration to expected future revenue flows. No adjustment was required 
during the years ended April 30th, 1998 or April 30th, 1997.

Reclassification
Prior year balances have been reclassified to conform with the current 
year's presentation.

Recently Issued Accounting Standards
The Company will conform to  SFAS 130, " Reporting  Comprehensive Income  
" and  SFAS 131 " Disclosures about Segments of an Enterprise and Related
Information "  for its' fiscal year beginning May 1st, 1998.


2. Marketable Securities

The Company has classified all its marketable securities as available for 
sale, and are presented at estimated fair market value, which has been 
determined based upon security market quotes. Realized gains and losses, 
calculated based upon specific identification of shares sold, are included in 
the Statement of Operations. Unrealized gains, amounting to $ 514,406 and 
$ 150,279 at April 30th, 1998 and April 30th, 1997 respectively, are included 
as a separate item in the Stockholders' Equity section of the Consolidated 
Balance Sheets.

3. Income Taxes

At April 30th, 1998, the Company had available, for Federal Income Tax
purposes, approximately $ 4,100,000 of net operating loss and other future tax 
benefits, which  expire in 2004 and thereafter. These benefits are not reflected
in the Company's Consolidated Financial Statements as a result of the 
uncertainty of future utilization.

4. Stockholders' Equity

Stock Option Plans
The Company has two stock option plans, the 1991 Stock Option Plan ("1991
Plan " ) and the 1996 Stock Option Plan ("1996 Plan"). Under both Plans
options to buy the Company's common stock have been granted to key
employees and / or directors of the Company, for terms ranging from five to 
ten years and which become exercisable at fixed times. No further options 
will be granted pursuant to the 1991 plan. Options which may result in the 
issuance of up to 500,000 shares of the Company's common stock may be issued 
pursuant to the 1996 Plan.

Pursuant to the 1996 Plan the Company may award  either Incentive Stock 
Options or Non Qualified Stock Options.  The terms for either may not exceed 
ten years, while vesting is either 20 % annually or as the Company's Board of 
Directors provides. Exercise prices approximate the market price for the 
Company's stock, except that in the case of award to holders of more than 
10 % of the Company's stock the exercise is to be set by the Company's Board of
Directors. 

Activity for the Plans is as follows for the years  ended;

                                  April 30th, 1998        April 30th, 1997
                                  Shares Average Price    Shares Average Price
Outstanding at beginning of year    505,332     $ 1.74     408,900    $1.73
 Granted                            525,000       1.95     109,802     1.75
 Exercised                         ( 98,400 )     1.00           0
 Forfeited                        (  34,990 )     1.69   (   8,296 )   1.76
 Cancelled                        ( 250,000 )     2.00   (   5,074 )   1.83
                                    -------       ----     -------     ----
Outstanding at end of year          646,942       1.92     505,332     1.74
                                    =======                =======
Exercisable at year end             179,277       1.90     414,486     1.73
                                   ========               ========



                      Options Outstanding
                       At April 30th, 1998

Exercise Price   shares  expires in  exercisable
 1.875           42,500  1998        42,500
 1.75            79,442  2001        31,777
 1.95           525,000  2003       105,000
                 ------              ------
                646,942             179,277
                 ======              ======

As a result of the 1991 and 1996 Plans, had the Company adopted the full 
value approach to accounting for employee stock options the Company's  results 
of operations would have been for the years ended;

                          April 30th, 1998               April 30th, 1997

Net loss;    As reported   (  $ 804,589  )                 (  $ 124,187 )
             Proforma      (  $ 828,564  )                 (  $ 148,754 )

Loss Per Share;
Basic;       As reported     (  $ .17  )                      ( $ .03 )
             Proforma        (  $ .17  )                      ( $ .03 )
Diluted      As reported     (  $ .17  )                      ( $ .03 )
             Proforma        (  $ .17  )                      ( $ .03 )

The foregoing disclosure has been computed using the Black Scholes option
pricing model with the following weighted average assumptions;
                             1998        1997
Risk free Interest Rate      5.63 %      6.4 %
Expected Lives               4 years     4 years
Expected Volatility          50 %        51 %
Expected Dividend Yield      0  %        0  %

Employee Stock Sale
In May, 1997, the Company sold 60,000 shares of its common stock to two 
key employees at a bargain price. The Company obtained the right to repurchase
these shares, in varying amounts, should the employees terminate their
employment in less than three years. The difference between the fair 
value of the shares, and the purchase price, $ 60,000, is being realized over 
the term of the repurchase agreement as additional employee compensation.

5. Commitments

Leases
The Company rents premises for its offices and the land upon which it has
constructed its' Carson City  operations center  and Danvers closeout 
retail store. Rent expense approximated $ 130,000 for each of the years ended 
April 30th, 1998 and April 30th, 1997. Future minimum rental payments under
operating leases, expiring at various dates through 2037, at April 30th, 
1998 were as follows;


 Year Ended
April 30th, 1999   $ 70,270
April 30th, 2000     13,650
Thereafter           45,850
                   --------
                    129,770
                    =======

The Company's lease for its New Jersey office facility expires in 
November, 1998 and will not be renewed. A smaller replacement , at a lower 
annual rent, is currently being sought. The lease for the land under the 
Company's closeout retail store expires in the year 2000. The Company does not 
anticipate a lease renewal.

Letters of Credit
The Company had outstanding $ 585,000 and $ 430,000, at April 30th, 1998 
and April 30th, 1997, respectively, of letters of credit issued to effect the
direct import of merchandise.

6. Short Term Borrowings

The Company's bank line of credit expired by its terms during the year 
ended April 30th, 1998 and has not been replaced. Another bank has extended 
the Company, for this year, $ 600,000 credit facility to secure the issuance 
of letters of credit. Advances under the new line bear interest at the bank's
prime rate plus 1.25 %, though no borrowings have been made to date.

7. Mortgage

In 1995, the Company borrowed $ 1,000,000, of which $ 913,000 was 
outstanding at April 30th, 1998, from a bank to finance the expansion of the 
Company's warehouse facility. The loan is secured by the warehouse, payable in 
monthly installments, bears interest at the rate of 9 1/4 %, subject to 
adjustment in the future, and is due in 2010.

8. Subordinated Convertible Debenture

In February, 1998, the Company issued $ 3,000,0000 principal amount of a 
five year, 8 %, debenture which is convertible, at $ 3.00 per  share, into  
the Company's  common  stock. The  Company  has  also  obtained  a
commitment for an additional $ 2,000,000 to be used for acquisitions and/or
internet activities. The conversion price of future borrowings is  
contingent upon the future market price of the Company's common stock. To 
date, no additional borrowings have been consummated. As a condition of the 
debt, a representative of the debenture holder has been elected to the 
Company's Board of Directors. The costs of this debt issuance have been 
deferred and are being amortized over the term of the debenture, using the 
effective interest rate method.

9. Related Party Transactions

The Chairman and President of the Company have for the years ended April 
30th, 1998 and April 30th, 1997 waived all but nominal current cash 
compensation, though they continue to receive fringe benefits such as 
participation in the Company health plans. In March, 1998, these individuals 
were granted options, pursuant to the Company's 1996 Plan, to purchase 250,000 
shares, each, of the Company's  common  stock  at $ 1.95 per share, 110 % of 
the market price of the Company's common stock at the time of grant. At the 
same time options to purchase 125,000 shares, each, of the Company's common 
stock at $ 2.00 per share, previously granted to these officers of the 
Company, were cancelled.

10. Subsequent Events

The Company's Danvers outlet store land lease expires in the year 2000. In
anticipation of an inventory  liquidation, a valuation provision of  $564,000
has been included in merchandise costs for the year ended April 30th, 1998,
to present the inventory at estimated net realizable value.


                                 Exhibit 27

This schedule contains summary information extracted from the Company's
accompanying audited financial statements and is qualified in its 
entirety by reference to such financial statements.


Period                            12 months        12 months
Fiscal Year End                   April 30, 1998   April 30, 1997
Period End                        April 30, 1998   April 30, 1997
Cash                                 $ 2,249,992      $   300,361
Securities                             1,073,308          636,072
Receivables                                    0                0
Allowances                                     0                0
Inventory                              1,790,259        3,247,405
Current Assets                         6,127,068        5,550,336
Property, Plant and Equipment          3,018,171        2,947,327
Accumulated Depreciation               1,266,561        1,116,178
Total Assets                           9,569,954        9,026,054
Current Liabilities                      430,585        2,501,461
Bonds                                  3,000,000                0
Preferred                                      0                0
Common                                    52,719           50,815
Other Stockholders Equity              4,887,592        5,234,733
Total Liabilities & Stockholders'      9,569,954        9,026,054
Net Sales                             11,133,544       12,089,517
Cost of Goods Sold                     4,632,363        4,712,549
Other Expenses                         7,630,443        7,674,138
Interest Expense                         284,378          320,870
Net Loss                                 804,589          124,187
Basis Loss Per Share                         .17              .03
Diluted Loss Per Share                       .16              .03